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G0ldfinger

UK House prices: News & Views

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Firstly, Germany will not be spared from all the outfall from the PIIGs desaster, thus rents and tenants may and probably will become less reliable. Secondly, German property is likely to become a prime target of financial repression - I think they will simply raise taxes and all sorts of other legal hurdles (environmental legislation etc.) by a lot. We are seeing that already.

Yes, the size of the potential outfall is totally unclear at present. Greece is only a tremor, Italy lurking in the dark. Again, it is the old inflation-deflation debate, but hey, we have an Italian at the helm of the printing press.

 

Thirdly, you are "immobile", as the German term implies. Of course, a lot of these arguments may not apply if you looked for a property to live in but if you look towards renting out you better choose wisely and in a good location I think.

 

I wouldn't be very keen to sell any gold for a property at this point.

Yes, I think the renting part could be tricky, and also if you lever up on fixed IR you better make sure you have a fixed (or at least non-decreasing) EUR-income too.

 

It is tricky. If they continue to inflate, this COULD be the sweet spot.

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Yes, the size of the potential outfall is totally unclear at present. Greece is only a tremor, Italy lurking in the dark. Again, it is the old inflation-deflation debate, but hey, we have an Italian at the helm of the printing press.

 

Yes, I think the renting part could be tricky, and also if you lever up on fixed IR you better make sure you have a fixed (or at least non-decreasing) EUR-income too.

 

It is tricky. If they continue to inflate, this COULD be the sweet spot.

What I forgot is the demographic issue. Some (but not all) rural areas in Germany (not only the East) are experiencing a rapidly shrinking population. There was an article in Der Spiegel a few months ago on this. It also seems very difficult to attract doctors to rural areas. Again, choosing wisely location-wise might be the difficult bit here.

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Investment in German residential property portfolios surges

 

Tuesday, February 07, 2012

Source: Property Wire

Transaction volumes across German residential property portfolios of more than 50 units increased by 44% year on year to €6.12 billion in 2011, new research from CBRE has revealed.

 

The number of traded residential units also increased by 27% to around 92,000 units within 194 transactions, indicating that the market for large portfolios of over 1,000 units has regained momentum.

 

The demand for residential units in Berlin was particularly strong. The capital city traded around €2.3 billion and more than 32,300 residential units last year, which accounts for 37 per cent of the registered investment volumes and 37% of all residential units in Germany.

 

Source: Property Wire

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I'll believe it when I see it:

 

Bank of England may put limit on mortgage ratios

 

The Bank of England could intervene and cap the maximum mortgages available to borrowers to stop another credit crisis, George Osborne said on Monday night.

 

Banks and building societies could be barred from offering loans if a buyer puts down only a small deposit.

 

Ahead of the credit crisis, buyers were offered mortgages worth more than the properties they were purchasing – or only a small amount less than the home's value.

 

When property prices fell, many were plunged into negative equity while other borrowers could not afford their mortgages.

 

Last night, Mr Osborne said the Financial Services Bill would give a new Bank of England committee powers to "alter the maximum loan-to-value ratios in mortgage lending to curb a sharp, unsustainable rise in house prices".

 

The new Financial Policy Committee (FPC) would also be able to force banks to hold more capital to stop credit bubbles growing out of control, as part of reforms the Chancellor said would "affect the bread and butter of people's daily lives".

 

Mr Osborne told MPs: "This FPC should act symmetrically... Its job is not just to try to moderate a credit boom but to try to alleviate a credit bust.

 

"The precise tools we give to the FPC are yet to be determined. I freely accept that we are largely in un-chartered territory in policy making here or indeed anywhere in the world.

 

"But surely the experiment of making no attempt to moderate the credit cycle, let the bubbles grow and burst and then clean up afterwards, has been an unmitigated disaster and I think we would be failing if we didn't look for an alternative approach."

 

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9065031/Bank-of-England-may-put-limit-on-mortgage-ratios.html

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I'll believe it when I see it:

:lol:

:lol: :lol:

:lol: :lol: :lol:

 

Whoha, they wanna crash & burn it!! Wow! Just like the commies over on the other side of the globe.

 

PUUUURGE!!!

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I'll believe it when I see it:

 

We can but hope. :(

 

I remember Brown promising "I will not let house prices get out of control!"

 

That was 1997 :angry: .

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They are worried

 

There is the old saying watch what they do not what they say.

 

In this case there is something to be read in what they say.

 

I have read into this as meaning that low interest rates are here to stay as they have no other choice. All borrowers I encounter are not paying off the capital and do not have the ability to do so either. It is a case of how much can I borrow and how much is the interst each month.

 

These controls will come into play to prevent a price spiral especially in the south east. Therefore leverage up and buy providing you can hedge any interst rate rise and that leverage my friends should held against the golfd and silver you hold.

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http://www.moneyweek.com/investments/property/uk/money-morning-dominic-frisby-buying-property-20600

Why the world’s biggest property bear may be buying a house

 

By Dominic Frisby Feb 08, 2012

...

 

I’m in a bit of a pickle.

 

My landlord’s just told me he wants his house back in June, which means I’ve got to move out.

That's a major problem in the UK with renting, as there seems to be a much higher turnover of property and liquidity of property than elsewhere in Europe.

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LOL, first Merryn, now Frizzers.

 

Of course, Dom isn't stupid. I'm sure he's done his sums and worked out that it is cheaper to buy a house now than to rent, and by how much. He knows the risks ahead for the housing market as much as anyone, but at the end of the day he needs a place to live.

I would not criticize any buyer today if they consider:

 

- How they will repay the loan ("the price will triple in 25 years" is not a valid argument)

- How they would cope with interest rates rising back to stressful levels at some point in the future, and sooner than official ZIRP is forecast to continue (2014?)

 

 

Now is not the time to be overstretching yourself to get onto the housing ladder/snake, but if you are in the fortunate position that you can afford to buy a nice place to live and not over-extend yourself then it is certainly a good time to be choosing this option and then to be making overpayments on your loan to insulate yourself somewhat from a shock event that force borrowing rates higher, and ultimately cut many years off your mortgage.

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Now is not the time to be overstretching yourself to get onto the housing ladder/snake, but if you are in the fortunate position that you can afford to buy a nice place to live and not over-extend yourself then it is certainly a good time to be choosing this option and then to be making overpayments on your loan to insulate yourself somewhat from a shock event that force borrowing rates higher, and ultimately cut many years off your mortgage.

 

Yes, it's a calculation of how much you want to lose in renting over how much you want to lose in property price.

 

At least you KNOW how much you are going to lose with renting :)

 

I'm also looking for a property now (even placed a -rejected- offer today:)) and, interestingly, have been through exactly the same thought process as he has and coming to the same conclusions.

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Yes, it's a calculation of how much you want to lose in renting over how much you want to lose in property price.

 

At least you KNOW how much you are going to lose with renting :)

 

Depends if you are looking for an investment or a home :D

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Yes, it's a calculation of how much you want to lose in renting over how much you want to lose in property price.

 

That's a very elegant way of putting it.

 

Of course, there is also an opportunity cost to buying that when tie your deposit money up in the house, but I daresay that for many people this is actually a good thing.

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Depends if you are looking for an investment or a home :D

 

Of course! Depends as well on how much you trust the fact that you'll be able to pay your mortgage without having to move home (that's my main problem, especially since it will mean my golden mattress will shrink almost to nothing in the process :) )

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LOL, first Merryn, now Frizzers.

 

Of course, Dom isn't stupid. I'm sure he's done his sums and...

 

Now is not the time to be overstretching yourself to get onto the housing ladder/snake, but if you are in the fortunate position that you can afford to buy a nice place to live and not over-extend yourself then it is certainly a good time to be choosing this option and then to be making overpayments on your loan to insulate yourself somewhat from a shock event that force borrowing rates higher, and ultimately cut many years off your mortgage.

 

I agree with the comment about not-overstretching, and I am pretty certain than Dom would not do that. So I can only wish him the best of luck if he goes ahead and buys.

 

But this part gave me pause:

"I hate the way house prices have alienated a generation. I hate the way people put off starting families simply because house prices are too dear. It’s all a consequence of our stupid credit-based fiat system of money."

 

Hmm.

Is that really such a bad thing? Delaying starting families?

 

One reason gold and commodities prices are rising, is that we are pressing up towards Peak Oil, Peak Gold, and Peak Everything.

 

Why is that?

Resources are limited on our planet, and...

 

WHOOPS! I'd better make a different comment, so I am not misunderstood.

 

(I hope Dom realises I am not criticising him personally. I am sure his family is wonderful, and I believe that it is great having them on the planet. But if financial considerations cause people to delay having families and maybe have fewer than they would otherwise, is that really such a bad thing.)

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http://www.moneyweek.com/investments/property/uk/money-morning-dominic-frisby-buying-property-20600

 

That's a major problem in the UK with renting, as there seems to be a much higher turnover of property and liquidity of property than elsewhere in Europe.

LOL, first Merryn, now Frizzers.

 

Of course, Dom isn't stupid. I'm sure he's done his sums and worked out that it is cheaper to buy a house now than to rent, and by how much. He knows the risks ahead for the housing market as much as anyone, but at the end of the day he needs a place to live.

[...]

Now is not the time to be overstretching yourself to get onto the housing ladder/snake, but if you are in the fortunate position that you can afford to buy a nice place to live and not over-extend yourself then it is certainly a good time to be choosing this option and then to be making overpayments on your loan to insulate yourself somewhat from a shock event that force borrowing rates higher, and ultimately cut many years off your mortgage.

This is a lot about personal choice, and about balancing many factors!

 

Dominic has ridden the gold bull for a long time, and he's now getting much more house per ounce than he would have got a few years ago. Is he getting out at the top? Probably not! Has he made a decent profit (in terms of sq.ft. per ounce)? Probably yes!

 

If he has done his numbers properly and if he finds the right place then he could do worse than buying now!

 

I also agree completely that tenancy laws and culture are a nightmare in the UK. Moving house seven times in ten years sounds awful and is also quite a stretch on resources (contacting agents, visiting properties, moving, paperwork etc.) - I can think of a million things more valuable to spend my time on...

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I'd be inclined to give it one more rental contract chance. Gold has come off her highs and London property has gone ape. Is this an early April fools from Dom? And does it mean there'll be no more 'Houses in gold' articles? If Dom really believes that average house prices will fall to 50-100oz/house, I have trouble seeing the logic of the sums. Mind you I dont suppose he is going to use too much gold as a deposit.

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I also agree completely that tenancy laws and culture are a nightmare in the UK. Moving house seven times in ten years sounds awful and is also quite a stretch on resources (contacting agents, visiting properties, moving, paperwork etc.) - I can think of a million things more valuable to spend my time on...

 

Yep, my little-un had lived in 5 different properties by the age of 3 (& 1/3 :rolleyes: ). (Not that it bothered her at that time mind you).

 

Ended up going back into the market 2009 after our latest landlord decided to sell the property we were in (had 2 months to move) and we found a great place at a great price.

 

In hindsight, it was all for the best, our house is great, and easily affordable, and we've made it exactly as we wanted.

 

Had the tenancy laws been different in the UK, and we could have decorated and altered gardens etc as we wished, who knows? I'm sure there is a good chance that we would still be renting.

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Yep, my little-un had lived in 5 different properties by the age of 3 (& 1/3 :rolleyes: ). ...

I fully understand that people tend to buy under these kind of circumstances.

 

The whole time my wife and I lived in the UK we lived in one single rented flat (almost 6 years). Since we have moved away from the UK, and after some trouble finding a suitable flat, we have now been living in another rented flat for almost 2 years. In my life as a renter (altogether 7 flats or so), no landlord has ever terminated my contract, it was always me. I guess I simply got lucky during my stint in the UK.

 

As you guys know, I try to find the "sweet spot" for buying property. But truth at the moment is that it still is substantially cheaper to rent than owning a property where I live, and this is without a bubble and at ultra-low rates. Go figure.

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As you guys know, I try to find the "sweet spot" for buying property. But truth at the moment is that it still is substantially cheaper to rent than owning a property where I live, and this is without a bubble and at ultra-low rates. Go figure.

 

Yep, it's the same where we are (proper family houses, you know, with gardens too, in a great area, great schools, park, loch etc), the yield is about 3%.

 

If you could rent one here (they just don’t seem to rent them out at all) money wise, you’d be better off than buying.

 

In town (W.End) the yield is about 6 to 7%, slightly more near to the "less nice" parts of the W.End, which are still quite OK).

 

Different market totally.

 

Seriously considered getting two flats in the WEnd, renting them out and renting a nice place by us. Trouble is, as said, they just never seem to come up for rent by us.

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Had the tenancy laws been different in the UK, and we could have decorated and altered gardens etc as we wished, who knows? I'm sure there is a good chance that we would still be renting.

 

I can only agree on that statement.

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What I don't like about the leveraging up that Dominic describes is that without serious need ("only" the discomfort of moving) you subject yourself to the banksters. A global margin call could wipe you out any time. Of course, the contracts usually don't have that possibility and if they did so the whole Western financial system would collapse instantly. But still. You can only really go bankrupt if you are in debt (otherwise, all you can do is diminish your equity).

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Oh you're gonna love this GM.

 

Fergus Wilson - yes, the male half of the BTL king and queen "The Wilsons", he who's image has been linked with yours in the past - is looking to stand as police commissioner! (Kent! No, not ****, the county Kent :rolleyes: )

 

http://www.kentonline.co.uk/kent_messenger/news/2011/november/16/landlord_in_bid_for_police_chi.aspx

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Maybe he also wants mortgage fraud being looked at more closely?

 

Oh you're gonna love this GM.

 

Fergus Wilson - yes, the male half of the BTL king and queen "The Wilsons", he who's image has been linked with yours in the past - is looking to stand as police commissioner! (Kent! No, not ****, the county Kent :rolleyes: )

 

http://www.kentonline.co.uk/kent_messenger/news/2011/november/16/landlord_in_bid_for_police_chi.aspx

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Maybe he also wants mortgage fraud being looked at more closely?

LOL

 

I reckon he has realised that he needs a job

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LOL

 

I reckon he has realised that he needs a job

 

Not sure about that. I heard they have been selling quite a few of their properties over the last few years, and still making a pretty penny on the "re-financed" others.

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